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Before the
Federal Communications Commission
Washington, DC 20554
)
) EB-06-IH-5642
In the Matter of
) Facility ID No. 36478
Lancaster Educational Broadcasting
Foundation ) NAL/Account No.
200932080028
Licensee of Noncommercial Educational )
Station WFCO(FM), Lancaster, Ohio FRN 0003018645
)
)
FORFEITURE ORDER
Adopted: July 8, 2009 Released: July 8, 2009
By the Chief, Investigations and Hearings Division, Enforcement Bureau:
I. INTRODUCTION
1. In this Forfeiture Order, we impose a monetary forfeiture of $6,000
against Lancaster Educational Broadcasting Foundation ("Lancaster" or
"Licensee"), licensee of noncommercial educational Station WFCO(FM),
Lancaster, Ohio, for violating Section 399B of the Communications Act
of 1934, as amended (the "Act"), and Section 73.503(d) of the
Commission's rules by broadcasting prohibited advertisements over the
Station.
I. background
2. This case arises from a complaint made to the Commission alleging that
noncommercial educational Station WFCO(FM) broadcast prohibited
underwriting announcements during its broadcast of Capital University
college football games during the 2006 season. Thereafter, the Bureau
inquired of the licensee concerning the allegations contained in the
complaint. Lancaster responded to the LOI on September 14, 2007.
3. On February 10, 2009, the Bureau issued a Notice of Apparent Liability
for Forfeiture ("NAL"), finding that the Licensee had apparently violated
the pertinent statute and Commission rules, and proposing a monetary
forfeiture of $7,500. On March 20, 2009, Lancaster responded to the NAL,
stating that the Station has taken remedial actions. Lancaster also urges
the Commission to cancel or substantially reduce the NAL's proposed
forfeiture amount asserting that it is unable to pay that amount and that
the forfeiture amount should reflect its history of compliance with the
Commission's rules.
III. DISCUSSION
4. The proposed forfeiture amount in this case was assessed in accordance
with Section 503(b) of the Communications Act, Section 1.80 of the
Commission's Rules, and the Commission's forfeiture guidelines set forth
in its Forfeiture Policy Statement. In assessing forfeitures, Section
503(b) of the Act requires that we take into account the nature,
circumstances, extent, and gravity of the violation, and with respect to
the violator, the degree of culpability, any history of prior offenses,
ability to pay, and other matters as justice may require. As discussed
further below, we have examined Lancaster's response to the NAL pursuant
to the aforementioned statutory factors, our rules, and the Forfeiture
Policy Statement, and find that cancellation or reduction of the
forfeiture on the basis of inability to pay is not appropriate in this
case. We find, however, that a reduction is warranted based on Lancaster's
prior history of compliance with Commission rules.
5. In its NAL Response, Lancaster does not dispute the NAL's finding that
the twenty announcements violated the Commission's underwriting rules and
so we will adopt the NAL's apparent conclusion concerning those
announcements. Instead, Lancaster claims that due to its strained
financial condition, it cannot satisfy the forfeiture amount and argues
that cancellation or reduction is therefore warranted. Lancaster also
urges the Commission to consider the remedial actions that it undertook
prior to the initiation of the Bureau's investigation as well as its good
compliance history as factors supporting forfeiture rescission or
reduction.
6. In support of its inability to pay claim, Lancaster has provided
financial documentation for 2006, 2007, 2008, and part of 2009. Lancaster
asserts that the proposed forfeiture amount is many times more than its
net income for the last four years. Lancaster also claims that it had
losses and low net income during the past four years, and that, if
required to pay, it will most likely have to cease operations. Lancaster
requests that we rescind or reduce the forfeiture in the instant case.
7. The Commission has determined that a licensee's gross revenues are the
best yardsticks for determining its ability to pay, and that the net-loss
experience does not, in the absence of other mitigating factors,
demonstrate a licensee's inability to pay. In its NAL Response, Lancaster
erroneously compares itself to the licensee in Discussion Radio, Inc. In
Discussion Radio, the Commission did reduce the forfeiture based on
inability to pay, but only after first considering the gross revenues of
the licensee. Although the Commission in Discussion Radio did also
evaluate the licensee's losses and modest income, the Commission reduced
the forfeiture because it held that the forfeiture amount either
approached or exceeded the licensee's gross revenues.
8. In contrast, in this case, the forfeiture proposed by the NAL does not
exceed or even approach the gross revenues of Lancaster; it falls well
within the percentage range that our precedents have found acceptable.
While Lancaster has also cited its net losses and low net income, the
Commission has held that "other financial indicators such as net losses,
may be relevant [but,] [i]f gross revenues are sufficiently great, the
mere fact that a business is operating at a loss does not by itself mean
that it cannot afford to pay a forfeiture." In this case, we find that
Lancaster's gross revenues are sufficient to sustain the forfeiture.
9. Lancaster also points to its low cash reserves and claims that if it is
required to pay the forfeiture amount it will "most likely have to cease
operations." Upon providing proper documentation, however, Lancaster may
request an installment payment plan option to lessen the immediate impact
of the forfeiture. For this reason, the full forfeiture amount need not be
satisfied by existing cash reserves and need not drive the Station out of
business. We note also that the Commission has considered arguments in the
past concerning potential cessation of operations, but only where such
cessation would result in the entire community of license losing broadcast
service. While the Station's assertion that it might go out of business
concerns us greatly, our precedent requires that in forfeiture proceedings
such defenses be evaluated with respect to the public impact of that
eventuality on the entire composition of broadcasters in the community, in
this case in Lancaster, Ohio. We note that Lancaster is not the only
broadcaster serving this community. Finally, based on our precedent, we
believe the gross revenue information the Licensee provided demonstrates
that Lancaster has sufficient resources to pay the forfeiture imposed
without jeopardizing the Station's ability to continue to serve its
community. Therefore, after considering the entire record, and in light of
pertinent Commission precedents, we do not find that rescission or
reduction is appropriate in this case based on inability to pay.
10. We also do not find Lancaster's post-facto remedial actions to be
mitigating. We have repeatedly stated that remedial actions taken to
correct a violation are not mitigating factors warranting forfeiture
reduction.
11. Finally, Lancaster asks that we consider reducing the forfeiture based
on its overall record of compliance with the Commission's rules. We have
reviewed our records and find no other violations against the Licensee.
Under similar circumstances, we have reduced proposed forfeitures, and
find that doing so in this case is appropriate. Consequently, we reduce
Lancaster's forfeiture amount from $7,500 to $6,000.
IV. ORDERING CLAUSES
12. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 503(b) of the
Communications Act of 1934, as amended (the "Act"), and Section 1.80 of
the Commission's rules, Lancaster Educational Broadcasting Foundation, IS
LIABLE FOR A MONETARY FORFEITURE in the amount of $6,000 for willfully and
repeatedly violating Section 399B of the Act, as amended, and Section
73.503 (d) of the Commission's Rules.
13. Payment of the forfeiture shall be made in the manner provided for in
Section 1.80 of the Rules within thirty (30) days of the release of this
Forfeiture Order. If the forfeiture is not paid within the period
specified, the case may be referred to the Department of Justice for
collection pursuant to Section 504(a) of the Act. Payment of the
forfeiture must be made by check or similar instrument, payable to the
order of the Federal Communications Commission. The payment must include
the NAL/Account No. and FRN No. referenced above. Payment by check or
money order may be mailed to Federal Communications Commission, P.O. Box
979088, St. Louis, MO 63197-9000. Payment by overnight mail may be sent to
U.S. Bank-Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza,
St. Louis, MO 63101. Payment by wire transfer may be made to ABA Number
021030004, receiving bank TREAS/NYC, and account number 27000001. For
payment by credit card, an FCC Form 159 (Remittance Advice) must be
submitted. When completing the FCC Form 159, enter the NAL/Account Number
in block number 24A (payment type code). Lancaster will also send
electronic notification on the date said payment is made to
Hillary.DeNigro@fcc.gov, Ben.Bartolome@fcc.gov, Kenneth.Scheibel@fcc.gov,
and Anita.Patankar-Stoll@fcc.gov. Requests for full payment under an
installment plan should be sent to: Chief Financial Officer -- Financial
Operations, 445 12th Street, S.W., Room 1-A625, Washington, D.C. 20554.
Please contact the Financial Operations Group Help Desk at 1-877-480-3201
or Email: ARINQUIRIES@fcc.gov with any questions regarding payment
procedures.
14. IT IS FURTHER ORDERED that a copy of this Order shall be sent, by
Certified Mail/Return Receipt Requested, to Lancaster Educational
Broadcasting Foundation, 201 South Broad Street, Suite 301, Lancaster,
Ohio 43140, and by regular mail to its counsel, Coe W. Ramsey, Esq.,
Brooks, Pierce, McLendon, Humphrey, & Leonard, L.L.P., Wachovia Capitol
Center, Suite 1600, 150 Fayetteville Street, Post Office Box 1800,
Raleigh, North Carolina 27602.
FEDERAL COMMUNICATIONS COMMISSION
Hillary S. DeNigro
Chief, Investigations and Hearings Division
Enforcement Bureau
See 47 U.S.C. S: 399b.
See 47 C.F.R. S: 73.503(d).
See Letters from Complainant to Benigno E. Bartolome, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, dated September
15, 2006, and March 1, 2007 (collectively the "Complaint").
See Letter from Benigno E. Bartolome, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, to Lancaster, dated August 20, 2007
("LOI").
See Letter from Steve Rauch, President, Lancaster Educational Broadcasting
Foundation, to Benigno E. Bartolome, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, dated September 14, 2007 ("LOI
Response").
See Lancaster Educational Broadcasting Foundation, Notice of Apparent
Liability for Forfeiture, 24 FCC Rcd 1384 (Enf. Bur., Investigations &
Hearings Div., 2009) ("NAL").
See Letter from Coe W. Ramsey, attorney for Lancaster Educational
Broadcasting Foundation, to Hillary S. DeNigro, Chief, Investigations and
Hearings Division, Enforcement Bureau, Federal Communications Commission,
filed March 20, 2009 ("NAL Response").
See NAL Response at 2-3.
See 47 U.S.C. S: 503(b).
See 47 C.F.R. S: 1.80.
See The Commission's Forfeiture Policy Statement and Amendment of Section
1.80 of the Rules to Incorporate the Forfeiture Guidelines, Report and
Order, 12 FCC Rcd 17087 (1997), recons. denied, 15 FCC Rcd 303 (1999)
("Forfeiture Policy Statement").
See 47 U.S.C. S: 503(b)(2)(E).
See NAL Response at 2-3.
See id. at 2-4.
See id. at Attachment C. Lancaster cites to San Jose Navigation, Inc. for
the types of financial documentation accepted by the Commission to
establish an inability to pay claim. See San Jose Navigation, Inc.,
Forfeiture Order, 22 FCC Rcd 1040, 1043 (2007).
See NAL Response at 3.
See id.
See id. at 2.
PJB Communications of Virginia, Inc. Memorandum Opinion and Order, 7 FCC
Rcd 2088 (1992) ("PJB Communications").
See Independent Communications Inc., Memorandum Opinion and Order and
Forfeiture Order, 14 FCC Rcd 9605, 9610 (1999); PJB Communications, 7 FCC
Rcd at 2089.
See NAL Response at 3 citing Discussion Radio, Inc., Memorandum Opinion
and Order and Forfeiture Order, 24 FCC Rcd 2206 (Media Bureau 2009)
("Discussion Radio").
See Discussion Radio, 24 FCC Rcd at 2207.
See id. at 2207.
See NAL, 24 FCC Rcd at 1384 (proposing a forfeiture of $7,500).
See, e.g., PJB Communications, 7 FCC Rcd at 2089 (forfeiture not deemed
excessive where it represented approximately 2.02 percent of the
violator's gross revenues); Local Long Distance, Inc., 16 FCC Rcd 24385,
24389 (2000), recons. denied, 16 FCC Rcd 10023, 10025 (2001) (forfeiture
not deemed excessive where it represented approximately 7.9 percent of the
violator's gross revenues); Hoosier Broadcasting Corporation, 15 FCC Rcd
8640, 8641 (Enf. Bur. 2002) (forfeiture not deemed excessive where it
represented approximately 7.6 percent of the violator's gross revenues).
In this case, the forfeiture represents a percentage within the range of
PJB Communications of Virginia, Inc., Local Long Distance, Inc., and
Hoosier Broadcasting Corp.
PJB Communications, 7 FCC Rcd at 2089.
See NAL Response at 2.
See, e.g., First Greenville Corporation, Memorandum Opinion and Order and
Forfeiture Order, 11 FCC Rcd 7399 (1996).
Station WHOK-FM, licensed to the Wilks License Company-Columbus, L.L.C.
and Station WLOH (AM), licensed to WLOH Radio Company, also currently hold
licenses for Lancaster, Ohio. See Federal Communications Commission, Media
Bureau, CDBS Public Access available at
http://fjallfoss.fcc.gov/cgi-bin/ws.exe/prod/cdbs/pubacc/prod/sta_list.pl
(last visited July 2, 2009).
See, e.g., Capstar TX Limited Partnership (WKSS(FM)), Notice of Apparent
Liability, 20 FCC Rcd 10636 (Enf. Bur. 2005) (forfeiture paid); AT&T
Wireless Services, Inc., Notice of Apparent Liability, 17 FCC Rcd 21866,
21871 (2002); KVGL, Inc., Memorandum Opinion and Order, 42 FCC Rcd 258,
259 (1973). While Lancaster's alleged remedial actions may have pre-dated
the Bureau's investigation, its actions were taken after the Complaint was
filed. Therefore, we still do not find their remedial actions mitigating.
See, e.g., Clear Channel Broadcasting Licenses, Inc., Notice of Apparent
Liability for Forfeiture, 21 FCC Rcd 4072, 4075 (Enf. Bur., Investigations
& Hearings Div., 2006) (forfeiture paid) (finding that during a
licensee-conducted contest, where the licensee engaged in remedial actions
after receiving complaints about the manner in which it conducted the
drawing for the contest, but prior to Commission investigation, such
action was not considered mitigating) ("Clear Channel").
See Clear Channel, 21 FCC Rcd at 4075.
See NAL Response at 3-4.
See, e.g., WMGO Broadcasting Corp., Inc., Forfeiture Order, 23 FCC Rcd
3754 (Enf. Bur., Investigations & Hearings Div., 2008).
See 47 U.S.C. S: 503(b), 47 C.F.R. S: 1.80.
See 47 U.S.C. S: 399b; 47 C.F.R. S: 73.503(d).
See 47 C.F.R. S: 1.80.
See 47 U.S.C. S: 504(a).
Federal Communications Commission DA 09-1511
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Federal Communications Commission DA 09-1511